There is a new kind of dotcom company that will emerge during Internet 2.0—this current and very distinct emerging phase of the Internet. I’m not sure what to call the new dotcom but I know what it is. It is a company that plays by the emerging new rules of the economy. New-rules companies will decimate established companies in many/most sectors but at varying rates.
Month: August 2005
No Insurance, No Business
One thing that prevents people from striking out on their own and keeps then in their jobs is health insurance. Individuals and small groups always pay more.
Technorati tags: healthcare, entrepreneurship, insurance
10 Steps to a Hugely Successful Web 2.0 Company
Charlie O’Donnell (I hope I got the apostrophe and capitalization right — Charlie, put your name on your blog somewhere):
Do you want to make money in your own home?
Forget real estate scams, tupperware, or becoming a spammer.
Create your own Web 2.0 company NOW!!
Its easy. Just follow these 10 simple steps and you, too, can be seen in fine dining establishments like Jamba Juice and speaking on panels for conferences like Distribucate 2.0, Fred, Bloggerstock and Elfdex.
Lesson’s in Hiring
I was on the board of a company that had a milestone to hire a vice president of sales by a certain date. We even had a budget to engage a recruiter to help us find the right candidate. Long story, short, we narrowed the selection to two candidates. The selection committee from the board, including the investors who had set the milestone, met with the candidates individually, and we endorsed the CEO’s recommendation.
Milestone met. Next round of funding closed. All is good… NOT!
To this day, it is my opinion that this specific decision led to the company’s ultimate failure (and the loss of over $5 million of investor money).
A Sobering Thought
SIX OUT OF TEN CEO-FOUNDERS OF VENTURE CAPITAL-BACKED COMPANIES ARE NO LONGER WITH THEIR COMPANIES WITHIN FOUR YEARS OF RECEIVING THEIR FIRST VENTURE CAPITAL INVESTMENT.
I hope that’s a sobering thought.
Technorati tags: startup, vc, leadership
Founding Teams
Solo is doable, but not advised especially as the complexity of the technology, market, and product you are building increases. A few years ago, Professor Ed Roberts, from MIT’s Sloan School, conducted a study and found that the probability of success dramatically increased with team size up to four or five entrepreneurs. One underlying reason was that teams of people with complementary skill sets perform far better than they would as individuals.
Success Without VCs Abounds in Business
In fact, a recent report from Babson College and the London School of Business concluded that fewer than one in 10,000 companies in the United States receive their initial funding from venture capital firms. The Global Entrepreneurship Monitor report also found that entrepreneurs provide 65 percent of their startup capital, with the rest of the funding typically coming from friends, family or co-workers.
Technorati tags: entrepreneurship, funding, vc
Three People for Version 1
If you can’t build your version 1 with three people, then 1. you need different people, or 2. you need to slim down your version 1. Now, before I get yelled at, this doesn’t apply to every project, but I do believe it applies to the majority. And sure, if you are building a weapons system, a nuclear control plant, a banking system for millions of customers, or some other life/finance-critical system, then you may need a fourth.
Cutting Up the Founder’s Pie
As a public service, I have “invented” a Founders’ Pie Calculator. As you will soon see, this calculator is not particularly profound. In fact, I’m sure I haven’t “invented” it, but, at the same time, I have never seen it before. [Caution: perhaps there’s a fatal flaw that I haven’t considered.]
Its primary benefits are that it provides a way to quantify the elements of the decision making process, and that it appears to be logical and fair.
Growth is out, Scale is in
These days the companies that are blowing the doors off everyone else – the Googles, PayPals, and eBays of the world – have shown us that the path to getting big fast is all about scaling, not just growing. They’ve learned how to create scalable business models that generate massive revenues without having to add massive amounts of resources to grow.
Ken Dyck 